January 20, 2022

News Analysis: The Internet Gets Physical

But now — nothing personal, mind you — the Internet is growing up and lifting its gaze to the wider world. To be sure, the economy of Internet self-gratification is thriving. Web start-ups for the consumer market still sprout at a torrid pace. And young corporate stars seeking to cash in for billions by selling shares to the public are consumer services — the online game company Zynga last week, and the social network giant Facebook, whose stock offering is scheduled for next year.

As this is happening, though, the protean Internet technologies of computing and communications are rapidly spreading beyond the lucrative consumer bailiwick. Low-cost sensors, clever software and advancing computer firepower are opening the door to new uses in energy conservation, transportation, health care and food distribution. The consumer Internet can be seen as the warm-up act for these technologies.

The concept has been around for years, sometimes called the Internet of Things or the Industrial Internet. Yet it takes time for the economics and engineering to catch up with the predictions. And that moment is upon us.

“We’re going to put the digital ‘smarts’ into everything,” said Edward D. Lazowska, a computer scientist at the University of Washington. These abundant smart devices, Dr. Lazowska added, will “interact intelligently with people and with the physical world.”

The role of sensors — once costly and clunky, now inexpensive and tiny — was described this month in an essay in The New York Times by Larry Smarr, founding director of the California Institute for Telecommunications and Information Technology; he said the ultimate goal was “the sensor-aware planetary computer.”

That may sound like blue-sky futurism, but evidence shows that the vision is beginning to be realized on the ground, in recent investments, products and services, coming from large industrial and technology corporations and some ambitious start-ups.

One of the hot new ventures in Silicon Valley is Nest Labs, founded by Tony Fadell, a former Apple executive, which has hired more than 100 engineers from Apple, Google, Microsoft and other high-tech companies.

Its product, introduced in late October, is a digital thermostat, combining sensors, machine learning and Web technology. It senses not just air temperature, but the movements of people in a house, their comings and goings, and adjusts room temperatures accordingly to save energy.

At the Nest offices in Palo Alto, Calif., there is a lot of talk of helping the planet, as well as the thrill of creating cool technology. Yoky Matsuoka, a former Google computer scientist and winner of a MacArthur “genius” grant, said, “This is the next wave for me.”

Matt Rogers, 28, a Nest co-founder, led a team of engineers at Apple that wrote software for iPods. He loved his job and working for Apple, he said. But he added: “In essence, we were building toys. I wanted to build a product that could really make a huge impact on a big problem.”

Across many industries, products and practices are being transformed by communicating sensors and computing intelligence. The smart industrial gear includes jet engines, bridges and oil rigs that alert their human minders when they need repairs, before equipment failures occur. Computers track sensor data on operating performance of a jet engine, or slight structural changes in an oil rig, looking for telltale patterns that signal coming trouble.

SENSORS on fruit and vegetable cartons can track location and sniff the produce, warning in advance of spoilage, so shipments can be rerouted or rescheduled. Computers pull GPS data from railway locomotives, taking into account the weight and length of trains, the terrain and turns, to reduce unnecessary braking and curb fuel consumption by up to 10 percent.

Researchers at General Electric, the nation’s largest industrial company, are working on such applications and others. One is a smart hospital room, equipped with three small cameras, mounted inconspicuously on the ceiling. With software for analysis, the room can monitor movements by doctors and nurses in and out of the room, alerting them if they have forgotten to wash their hands before and after touching patients — lapses that contribute significantly to hospital-acquired infections. Computer vision software can analyze facial expressions for signs of severe pain, the onset of delirium or other hints of distress, and send an electronic alert to a nearby nurse.

Steve Lohr is a technology reporter for The New York Times.

Article source: http://feeds.nytimes.com/click.phdo?i=4b0b884a0b4a327d1e5f81bf8d972e7a

German Vision Prevails as Leaders Agree on Fiscal Pact

Exactly 20 years to the day after European leaders signed the treaty that led to the creation of the European Union and the euro currency, Chancellor Angela Merkel of Germany persuaded every current member of the union except Britain to endorse a new agreement calling for tighter regional oversight of government spending. 

“It’s interesting to note that 20 years later we have realized — we have succeeded — in creating a more stable foundation for that economic and monetary union,” Mrs. Merkel said, adding, “and in so doing we’ve advanced political union and have attended to weaknesses that were included in the system.”

The agreement was a clear victory for Mrs. Merkel, and it prompted a sharp rally in stock markets in Europe and the United States. But it is viewed as unlikely to calm fears that Europe is unwilling to muster the financial firepower to defend the sovereign debts of big member states, including Italy and Spain, that have little or no economic growth and have big debt bills coming due soon.

At the meeting, member governments agreed to raise up to $270 billion that could be used by the International Monetary Fund to aid indebted European governments, and they moved up the date that a European rescue fund would come into operation. But the sums involved fell well short of what many investors and some Obama administration officials have argued are needed to ensure the survival of the euro. Administration officials on Friday welcomed the long-term overhaul of the euro zone’s rules, but argued that stronger measures were needed in the short run.

Germany has argued that the solution to the euro crisis is not a series of short-term bailouts but a long-term overhaul of the rules that govern European integration. Germany is using market turmoil as a cudgel to force more spendthrift European countries to adjust to their straitened circumstances by reducing spending and ushering in a period of austerity. But critics say such steps risk a deep recession.

The European Union emerged in its current form in the late 1980s and early 1990s as a French-German idea to bind the region in the aftermath of the Soviet collapse. It is now being reinvented by a united Germany that has grown disillusioned by what it considers as debt-happy neighbors and is no longer reticent about wielding its economic and political clout.

The big loser in Brussels was Britain, which had endorsed the 1991 Maastricht Treaty on European integration but opted out of the new euro common currency to preserve its economic and monetary independence.

Prime Minister David Cameron, a Conservative and self-acknowledged “euroskeptic,” was isolated in his refusal to allow the German prescription of “more Europe” — to give teeth to fiscal pledges underpinning the euro.

Mr. Cameron was perceived as having made a poor gamble in opposing the push by Mrs. Merkel and President Nicolas Sarkozy of France, embittering relations and possibly damaging his standing at home. Though some other countries, including Denmark and Hungary, initially shared Britain’s skepticism of the German-led agreement, only Britain ultimately rejected it.

The new disciplinary rules may help ensure that there will not be another euro crisis, but they may not be sufficient to fix the current crisis — to assuage market unease that Europe and the European Central Bank are not doing enough now to stand behind vulnerable nations.

While some progress was made here in increasing the size of the bailout funds to help the most heavily indebted states, it is still considered inadequate. That is largely because Germany refuses to sanction the use of the European Central Bank as a lender of last resort for the countries in the euro zone.

The leaders sent an important signal to the bond markets by scrapping a pledge to make private investors absorb losses in any future bailout for a euro nation. But they made only limited progress in increasing the financial backstop to vulnerable and core nations like Italy and Spain, which are paying unsustainable interest rates on their bonds.

What worries many is the size of the euro zone debts that must be refinanced early next year. Euro zone governments have to repay more than 1.1 trillion euros, nearly $1.5 trillion, of long- and short-term debt in 2012, with about 519 billion euros, or $695 billion, of Italian, French and German debt maturing in the first half alone, according to Bloomberg News.

But the new Italian prime minister, the economist Mario Monti, was more upbeat. He pointed to an increase in the firewall and in economic responsibility and said that the idea of collective bonds was not dead, despite continuing German and French opposition.

“Euro bonds, for which a tomb without flowers was being prepared, are not named” but will be raised again in March, he said. “There is more money, there is more discipline, it could be that this isn’t enough, but it doesn’t seem to be a failed summit.”

Mrs. Merkel said the crisis had provided important new lessons for how to restructure Europe. “We will use the crisis as a chance for a new beginning.”

In Brussels, much of the attention was on Mr. Cameron’s failure to get what he wanted or to stop other leaders from getting what they wanted.

Reporting was contributed by Jack Ewing from Frankfurt, Mark Landler and Annie Lowrey from Washington, Rachel Donadio from Rome, and James Kanter from Brussels.

This article has been revised to reflect the following correction:

Correction: December 10, 2011

An earlier version of this article incorrectly stated that an accord between European Union countries would allow the European Court of Justice to strike down a member’s laws if they violate fiscal discipline. No such term of an agreement was reached.

Article source: http://www.nytimes.com/2011/12/10/business/global/european-leaders-agree-on-fiscal-treaty.html?partner=rss&emc=rss

Euro Zone Finance Ministers Press Greece to Meet Aid Targets

The most immediate issue facing the ministers, who are meeting in Luxembourg, is the disbursement of an €8 billion, or $10.6 billion, installment of aid, without which Greece could default on its debt within weeks — an outcome with potentially disastrous consequences for the euro zone.

The meeting Monday had originally been scheduled to approve the disbursement, part of a €110 billion rescue program for Greece agreed to in May 2010. But continuing doubts about Greece’s ability to push through harsh structural changes have led to tense discussions with officials from the so-called troika of international lenders — the European Commission, the European Central Bank and the International Monetary Fund.

Representatives of those institutions, now visiting Athens, have yet to make a recommendation to release the money, and no decision is expected this week.

“What we want the Greeks to do is what they said they were going to do,” said one euro zone diplomat in Luxembourg, who was not authorized to speak publicly.

The finance ministers also discussed expanding the firepower of the currency’s rescue fund by leveraging the €440 billion zone bailout fund. Finland’s demand for collateral in exchange for loans to Greece, which is another obstacle to a resolution of the crisis, was also on the agenda.

Athens announced Sunday that its 2011 budget deficit was projected to be 8.5 percent of gross domestic product, down from a projected 10.5 percent last year but shy of the 7.6 percent target set by international lenders.

The government, which on Sunday also adopted a draft austerity budget for 2012, attributed the gap to the deepening economic downturn but said it was on course to improve its public finances.

Evangelos Venizelos, the Greek finance Minister, said his country was taking “all the necessary difficult measures in order to fulfill its obligations towards its institutional partners.”

“The new budget, the budget for the new year, is very ambitious,” he added. “Our target is to present for the first time, after many years, a primary surplus of €3.2 billion.”

Elena Salgado, the Spanish finance minister, said Monday that she supported the idea of leveraging the euro bailout fund, the European Financial Stability Facility. She said she was not advocating a larger fund, but “more flexibility and more capacity.” That message was echoed Monday by George Osborne, the British chancellor of the Exchequer. “The euro zone’s financial fund needs maximum firepower,” Mr. Osborne said at a Conservative Party conference in Manchester.

“The euro zone needs to strengthen its banks,” he said. “And the euro zone needs to end all the speculation, decide what they’re going to do with Greece, and then stick to that decision.”

“The time to resolve the crisis is now,” Mr. Osborne continued. He is due to join the other European finance ministers in Luxembourg on Tuesday. “They’ve got to get out and fix their roof, even though it’s already pouring with rain.”

Article source: http://www.nytimes.com/2011/10/04/business/global/euro-zone-finance-ministers-press-greece-to-meet-aid-targets.html?partner=rss&emc=rss

Nagging Fears on Europe Slow a Wall Street Rally

Stocks rose on Tuesday, extending a global rally into a third consecutive day, as investors anticipated a more ambitious plan by European leaders to deal with the euro zone debt crisis. But they were unable to hold on to their sharpest gains.

After jumping 2.5 percent on Monday, the Dow Jones industrial average added 1.33 percent Tuesday, rising 146.83 points, to 11,190.69. Earlier in the day, the Dow was up as much as 325 points. But the markets lost steam in late trading on concerns that a second bailout for Greece could be scuttled by countries that wanted banks to shoulder more of the burden.

The euphoria at the start of the week centered on talk of a plan to give extra firepower to Europe’s proposed 440 billion euro (about $600 million) bailout fund for troubled nations and banks. Under a possible new plan, the fund could be enhanced to insure as much as a couple of trillion euros in loans.

Even if leaders manage to eventually expand the war chest, it is far from certain that the larger crisis in Europe will be contained. For one thing, the money might not be enough if the already weakened European economy falls into a prolonged recession. Recent data show that manufacturing and services activity there are sliding toward contraction, and that the region’s economy probably stagnated in the third quarter.

As it is, Greece, Portugal and Spain are looking at lengthy economic downturns as a result of harsh austerity measures adopted to straighten their finances. In Italy, economists are increasingly worried that that a 45 billion euro ($61 billion) austerity package recently rushed through Parliament could tip the economy into a downturn.

Germany and France also have started to show signs of a slowdown, a more worrisome development since they are considered engines of the European economy.

“They are buying time,” said Jens Nordvig, an economist at Nomura in New York. “But it only postpones the problem. Growth is slowing in countries like Italy. They may be too late.”

The immediate hurdle for each of the 17 countries in the euro currency zone is to approve the 440 billion euro fund proposed in July. So far only seven have done so. Slovenia signed off on Tuesday and there are critical votes set for Wednesday in Finland and in Germany on Thursday.

European leaders say the process should be completed by mid-October but already investors judge it insufficient to cope with the scale of problems in Greece and other troubled nations.

As a result, a new plan is emerging in Europe that would let the European Central Bank or another European institution, like the European Investment Bank, buy troubled sovereign debt or loans from euro zone banks with the backing of the fund.

Timothy F. Geithner, the Treasury secretary, turned up the heat on Europe in the last few days to expand the war chest exponentially by leveraging its resources, possibly by running it like a bank that could borrow additional money.

The governor of Canada’s central bank, Mark Carney, said last week that Europe should make about one trillion euros available to “overwhelm” the crisis.

Lorenzo Bini Smaghi, a member of the executive board of the European Central Bank, offered cautious backing to the idea on Tuesday, saying leaders “need to look at possible leverage.” The bank’s support would probably be essential to such a plan.

But critics said that using it to buy distressed government debt held by banks would only shift the problem to Europe’s taxpayers. That would worsen the region’s sovereign debt crisis and potentially compromise even relatively strong nations like Germany and France.

Other Europeans are grumbling that the United States is hardly in a position to lecture them on how to manage a crisis, and it is not clear how quickly or easily the fund could be expanded. Germany, for one, does not want the independent central bank to be involved in the fund’s operations.

Still, no politician wants to pump even more taxpayer money directly into the fund, which would anger voters and put the AAA ratings of Germany and France at risk. Wolfgang Schaüble, the German finance minister, on Tuesday derided the idea as “silly.”

The prospect of a new plan, which emerged during a weekend of meetings of world leaders in Washington and after some urging by the United States, seemed to represent a realization that Europe had to do something to bring itself back from the brink. For weeks, global markets had lurched downward and investors had become increasingly concerned that Europe’s failure to act was disrupting confidence and growth around the world.

On Tuesday in Europe, the Euro Stoxx 50 index, a barometer of euro zone blue chips, closed up 5.3 percent.

Later, the United States markets gave up some of their gains after The Financial Times reported that some countries were demanding that banks take a bigger hit in Greece’s debt restructuring and that Greece needed deeper financing than was thought two months ago. The Standard Poor’s 500-stock index rose 1.07 percent, or 12.43 points, to 1,175.38, and the Nasdaq composite index gained 1.2 percent, to 2,546.83.

Earlier Tuesday, Mohamed A. El-Erian, chief executive of Pimco, who has long been pessimistic about Europe’s efforts to solve its crisis, expressed optimism for a solution. “They recognize they have deep problems and they recognize they need to do something about it,” he said in a Bloomberg radio interview. “This was a very important wake-up call for Europe.” He added that European leaders “finally get it.”

But skepticism remained.

“It is not clear to me that, though they may have ‘got it,’ anything has actually happened,” said Carl Weinberg, an economist at High Frequency Economics. “At this point, you have got to show me the money.”

Joshua Brustein contributed reporting.

Article source: http://feeds.nytimes.com/click.phdo?i=bd62772a11b062080fbc6b08416eec84

Central Banks in Europe Keep Rates on Hold

FRANKFURT — Once again using its firepower to try to calm market tension after efforts by euro zone governments failed, the European Central Bank unexpectedly intervened in bond markets Thursday in an apparent attempt to prevent the region’s sovereign debt crisis from engulfing Italy.

The E.C.B. also moved to prop up weaker banks that may be having trouble raising funds, expanding its lending to euro zone institutions at the benchmark interest rate. The E.C.B. left that rate unchanged at 1.5 percent on Thursday, while the Bank of England left its benchmark rate at a record low of 0.5 percent.

Jean-Claude Trichet, the president of the E.C.B., declined to say what bonds the bank was buying or how much. He said the bank acted in response to “renewed tensions in some financial markets in the euro area.” It was the first such intervention since March.

Mr. Trichet also said that uncertainty created by the U.S. budget debate had unsettled European markets. “It’s clear the entire world is intertwined,” he said. “What happens in the U.S. influences the rest of the world.”

As markets demanded higher risk premiums on Spanish and Italian bonds during the past week, analysts began to speculate that the E.C.B. would return to the bond market. But most had not expected the bank to act so quickly.

Yields on Spanish and Italian bonds fell Thursday, though experience shows the decline could be short-lived. Similar action last year helped push down yields on Greek debt, but they later rose to record levels.

The E.C.B. will not disclose the scope of its bond-buying until next week at the earliest, but early indications were that the amounts were relatively modest. “It might be interpreted as more of a warning shot rather than a broad-based onslaught,” analysts at Barclays Capital said in a note.

The E.C.B. also responded to signs of stress in interbank markets as banks, wary of each other’s exposure to troubled government paper, became reluctant to lend to each other. One worrisome sign was a spike in the cost for European banks to borrow dollars in the open foreign exchange market.

Mr. Trichet said that next week the E.C.B. would lend banks as much cash as they wanted for six months at the benchmark interest rate, assuming they can provide collateral. A six-month term is longer than is customary.

The bank’s actions on Thursday provided another example of the E.C.B. acting as the euro area’s firefighter after efforts by governments fell short.

European leaders decided last month to authorize the European Financial Stability Facility — the European Union’s bailout fund — to buy bonds in open markets, relieving the E.C.B. of that responsibility. But it will take months before the E.F.S.F. is able to start making purchases. In addition, European leaders did not increase the size of the fund, leaving questions about whether it would be up to the task if a country as big as Italy or Spain needed help.

Speaking to reporters after a regular meeting of the E.C.B. governing council, Mr. Trichet beseeched political leaders to speed up efforts to cut their budget deficits and remove impediments to growth, such as overly protected labor markets.

“The key for everything is to get ahead of the curve, in fiscal policy and structural reform,” he said.

Mr. Trichet also gave a more subdued view of the economy. “Recent economic data indicate a deceleration in the pace of economic growth in the past few months, following the strong growth rate in the first quarter,” he said. Mr. Trichet said that while he expected moderate growth to continue, “uncertainty is particularly high.”

That assessment suggests the E.C.B. may wait to raise its benchmark rate again. The central bank has raised its main rate in two steps since April, from 1 percent to the current 1.5 percent, in an attempt to head off rising inflation.

Analysts expect the E.C.B. to raise rates for the 17-nation euro area again at the end of this year or early next year, after Mr. Trichet retires at the end of October and hands the presidency to Mario Draghi, governor of the bank of Italy.

Similarly, the Bank of England left its benchmark rate unchanged because the country’s economy remains weak. The Bank of England also kept its bond purchasing program — which injects money into the economy to spur growth — at £200 billion, or $326 billion.

The British economy grew 0.2 percent in the second quarter from the first quarter, when its G.D.P. rose 0.5 percent. The manufacturing sector shrank in July, an unexpected development that also pointed to a weak economy.

One factor weighing on the British economy has been the sovereign debt crisis, since the euro zone is the country’s biggest export market.

“It’s not a spectacular recovery,” said Michael Taylor, an economist at Lombard Street Research in London. “It’s choppy and it’s disappointing and that does argue for an unchanged policy well into next year.”

A far-reaching government austerity program that froze public sector pay and pensions and increased some taxes is another factor holding back growth. At the same time, consumer price inflation remains well above the Bank of England’s 2 percent target — conditions that would normally lead the bank to raise interest rates.

Prime Minister David Cameron warned last month that the economic recovery would be difficult. So far his government is sticking to the deepest budget-cutting program since World War II despite mounting criticism from members of the opposition, who argue it is too punishing.

There is also growing pressure on the British government and the central bank to consider other measures to fuel economic growth. The National Institute for Economic and Social Research, which supplies information to the Bank of England and other clients, said on Wednesday that cutting taxes would be one way to help the economic recovery.

British businesses continue to feel the impact of the weak economy. Holidays 4U, a travel service, ran out of money on Wednesday, leaving hundreds of passengers stranded. The fashion retailer Jane Norman and the wine retailer Oddbins went into administration earlier this year. Many stores have started to discount merchandise early to lure wary consumers, whose disposable incomes have been reduced by inflation.

Julia Werdigier reported from London.

Article source: http://feeds.nytimes.com/click.phdo?i=3abf6d4cdc9031951a68b9185db878cb